Assume for Down Corporation That Current Assets Are $500,000

question 82

Multiple Choice

Assume for Down Corporation that current assets are $500,000.Included in this amount is $40,000 for merchandise inventory and $60,000 for prepaid expenses.Current liabilities are $200,000 and total liabilities are $550,000.What is the acid-test ratio?

• A) 1.60
• B) 0.91
• C) 2.00
• D) 1.14

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Definitions:

Mean

The average of a set of numbers, calculated by dividing the sum of the values by the number of values.

Standard Normal Variable

A standard normal variable is a random variable that follows a normal distribution with a mean of zero and a standard deviation of one.

Standard Normal Distribution

A normal distribution with a mean of 0 and a standard deviation of 1, serving as a basis for comparison for other distributions.

Mean

The arithmetic average of a set of values, calculated by adding all the values together and dividing by the number of values.